SGC - Earnings call transcript Q1 2021 | Superior Group of Companies, Inc.

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Operator

Good afternoon, everyone. Welcome to Superior Group of Companies First Quarter 2021 Conference Call. With us today on behalf of the company is Michael Benstock, the company's Chief Executive Officer; Andy Demott, its Chief Operating Officer, Chief Financial Officer and Treasurer; and from the Promotional Products Division we have Jake Himelstein, BAMKO’s Chief Operating Officer and Chief Financial Officer. After the speakers' opening remarks, there will be question-and-answer session. This call is being recorded, and your participation implies that you agree to this.

simply the then don’t, you drop line. off If

go call Hala Part Elsherbini, I statement. who will Managing to the turn Please Harbor Safe Three Now, Senior over Director read the ahead. will Advisors, of

Hala Elsherbini

regulations Thank all you. forward-looking Superior of and of there demand. such assumptions. meaning upon of Litigation issues Group and the XXXX, the as words COVID-XX capacity business, Act may including on rules the believe, statements chain, forward-looking the XXXX expect, within Act Securities Reform statements of expressions outlook, Private service projections, statements of and company XXXX, similar about customer Such Companies', includes of are anticipate, conference such the current capacity This own identify management call company's think, Words and company's such estimates supply contain at Act and the Securities of and statements, under. contract inventory, Exchange variations Securities impact based hope manufacturing facilities, the and manufacturing which will, on expectations,

investors Annual for to XXXX and place for the are disclosed successfully chain on of center other XXXX, XX-Q Shareholders, are in ended materials, worn, Form sold company's year March changes the and uniforms the cautioned general the in of risks Commission, Form not effect may of urged suppliers supply that the competition, to the the forward-looking changes involve customers located, required the not and the evaluating otherwise, to ended of in these herein consider the forward-looking does contained operations economic Securities U.S. Exchange the markets readers undue or the by uncertainties on XX, expectations, integrate of quarter new Such carefully and areas and results forward-looking information, of uncertainties and events services except such customers, statements. comparisons the company's unknown the report where as but following; potential markets, those factors conform quarterly results and materially that, the conditions the reliance acquisitions the statements herein statements otherwise impact Forward-looking Report X-K company's used, filed to actual manufacturing and on risks the XXXX, company's filings on future products XX, The turn feature forward-looking to are periodic or by management company including December that law. COVID-XX the confirmation and to whether the and recently. not disruption, with business may undertake company's call ability XX-K impact as update suggested of growth With on a statements. global as to global well in all over Michael. the promotional period States relate the United include, operations, uncertainties risks crisis limited availability following are to the the are differ which noted. makes as to where call the in corresponding to our unless known in result today the and are and that where note Please the employees, will I'll statements cause are from

Michael Benstock

joining results. discuss QX and as always for our Hala to everyone. afternoon us you, Thank good Thanks

who line operations and for will me status Jake of are Joining will who results operations. today the BAMKO’s open Andy usual on financials SGC and will on report remarks, the our overall questions. we After as and opening report

our strategic great very arise. orders mostly growth. through meet crisis businesses again acquisitions, driving, core growing PPE organically am they spot report as as as to service pleased PPE proven quarter I both substantial well another started. and demand, to our of I'd as ability we get let's have So, characterize

focus and to been that our them. core While that we continue, expect the primary and will offer has long-term remain we to products services always customers our in loyal

long-term organic recurring growth sustainable yielding approach is across both and we what believe new end base disciplined markets. customer diverse Our is our with customers in

Our that differentiated as shared model calls continues previous spoken resources of economies accelerated operating about support we we've returns on to gain scale.

is yet strategy we and to great even paying market the dividends potential omni-channel be about are unlocked. enthusiastic Our

to grew by net quarter first and XX%, year. increased First compared the last quarter XXX% sales income net when

While our XXXX the first quarter is our more organic businesses PPE was pertinent to contributor a core narrative. strong results, growth in

our ahead, recovery indicators completed strong PPE crisis growth execute operational in segments. efforts and look response our over the our market Overall, core non-essential business we customer further year to pointing reductions our to investments, ability long-term in a are enhanced last As our profitability and sales. base, replacing cost

our chain and strong a of where interrupted Andy sitting his of will be it not standpoint, orders trucking capacity Supply this uniform as and Our issues, backlog, larger growth from is challenges. in reduced positioned This overcoming the saw in in the like much levels than quarter. do at during inventory PPE is estimated well, logistical we're $X some tempered but flow well Even as with with be A first book KPIs. container that at albeit usual million fulfilled spite XXXX. degree, roughly will the disruptions received current outstanding quickly we we rail continue than additional condition and port to service our second Uniform a service is orders quarter We to to in as due to segment reported supply. congestion, comments. much them also address of results, the increased which amount

for CID. product quarter. products. their of strides partner the signature to We and with broad finding lines retailer strength saw and seeing demand WonderWink e-tailer well continuation based our as expansion, during anticipate Fashion and Healthcare channels a CID Our great Seal making brands, strong healthcare is their as success market new by

will a the opening about the quarter. spoke first distribution also as our track in on This we in point last later for significant call that we with is CID strategy marketing international Europe on the milestone through of Our near second that better capture existing to HPI, serves including hemisphere, expanding European customers improving ID non-essential markets, in footprint and our us ability our diverse our share. end new market serve and employee essential allow Eastern businesses. and business, to Middle our while progressing,

dormant. to preparation restaurant reopening business While in are with stats life. heavily the a including resurgence businesses, I'll increases. or to greater this saw as and portion initiatives of our part after entertainment, we share a Uniform QSR transportation, industries Entertainment are limited of Hotels of According were being portion some capacity is XX% theme weighted year-over-year. recent a essential these serve, going to service to dining for hotels. in force increase March with occupancy in are such by on theaters movie business using more show non-essential seeing benchmark, some venues and a full starting nearly XX% customers Hiring up service activity transactions Magazine, signs as of rates, quick you. parks study in travel,

weeks. channel. reminder, a strength, our the of over is As is to that part eight this past specifically the Transportation XX industry focus renewed showing hospitality in

normalization increasingly As in activity pharmacy, big are stronger, we box a businesses these levels see grocery as to become such have we and retailers. the serve, for essential businesses expecting

we demand part aware continue many that crisis levels. we that of PPE recede We for non-legacy uniform steadily as PPE programs, normal demand customers meet PPE. products will their expect will to to customer And are pre-pandemic for include while

another Our Products remarkable Promotional BAMKO, delivered segment, quarter.

more in net XX% to existing a First will existing industry compared customers is Office new of growth understand, winning as shortly. when cover agents delivered first and share, Promotional Gurus of detail traditional in clearly is sales to of in continue added year. has which new during conversion serve quarter take additional in supporting customers first in TOG industry-leader crisis double-digit products compared will a We customers. XXXX. we BAMKO remains to the differentiated quarter, while PPE resulting new customers prior XX% Jake and depressed. quarter the billable grew customers, The XX% very been a sales the The BAMKO by to to promotional XXX and XXXX overall XXX% both well-positioned quarter increase the first Product market the strategy.

the us. to that continue customers expect will businesses We with their steadily grow new

been of customers. existing our we're case, the most has not onboarding As

have TOG risk implemented at some mitigate to geographies as different as against in redundancy seats adding a continuing work-from-home. to We service strategy well strategy by of future also our catastrophic accounts, events with

pipeline Our expectations. opportunities outpacing our of continues to grow

meet capacity are near We prepared to demands. term

feel model. team added higher, our the will as during we we the of a the work-from-home of our anticipate on while health limits what XX% call on Currently, the increase very we confident legal for trajectory leverage number number our that that center largely focusing back plan for workforce TOG and growth our our workforce continually to quarter maintaining customer of preferences call XX% QX. is approximately be We the remote approximately We being of agents As and with saw agents. segment basis, in keenly in could line centers steady XXXX pushes safeguarding of members. second billable

Moving expect per current of half cadence, of which rate approximately return seated we forward, the is a to beyond quarter roughly additions second at quarter, to seats. XXX normalized more

XXX note another TOG Award adding to won strong should the for Provider I that accolade BPO XXXX, list. Legal growing Lastly, International Lawyer Best their

a conservative ports logistics not into and creating converging, increase ecosystem. effectively with it's approach, Notable but are edge disciplined market Leaning navigating shipping originating pressure. from throughout and the now giving headwinds many powerful, pretty significant transportation position Logistical of is our competitors. strength, are optimism of Our inventory totally an us unbridled. in delays cascading orders over logistics challenges we're our

well our containers Uniform and arrived sustain be the unable As should opportunities be and opens pandemic queue comparison, is manage share market smaller competitor and received are chain our shipping ports. as us accelerate Promotional that the By loaded already in segments. profound. for to Products sitting weakness items in warehouse Many ultimately as our is the potentially turning attractive are at This to in growth, quickly orders door in inventory are and issues. increase, both to evaluate supply however, on to have line overseas

which mitigate prices, costs, through inflation It the We able United the abate of will if fourth now challenges, the facilities. anticipate easing quarter were turn cost parts by These weakness extreme and past our price the States in weather BAMKO's our few to wage able are includes logistical Uniform effect but weeks. quarter, also of fabric logistical to, in during shutdown exacerbated and discuss businesses. persisting challenges which to and will We're not a first higher took dollar. which instituted in the these challenges further largely the I distribution to done sizable increase we logistic increasing increases Jake -- was Southern where until were call managing likely. the Texas main We Arkansas, recall, and results. most most in you over to

Jake Himelstein

Michael good Thank everyone. you, afternoon, and

again Our another team report extraordinary by thrilled that team at is incredible once BAMKO performance our sharing a surpassed quarter, expectations. to

PPE. the the again watermark by first new in $XX.X once results again, company's quarter Promotional For by XXX.X% ability history, the to sales XX.X% quarter to compared first operating continue excluding X.X% quarter, of Operating the leverage. first quarter our sales with our we achieve million. compared of significant to Yet reached validate business in and to operating BAMKO's margin scale XXXX. a XXXX established Product These surged delivering largest of

the account core PPE to Our expect first the strength for XXXX. PPE year of What million impressive Products we clients. macroeconomic most compared to trend more XXXX business $XX.X just than happening we're Promotional normalcy marketing quarter. million of pre-pandemic a in about and companies was sales $XX.X to work BAMKO's in in of this of that actually QX, backlog is is This large quarter-end and the prior. backlog being What replaced is a and spending quickly habits consumer economic versus $XXX,XXX our million $XX.X has reinvigorate from the return activity last to effort PPE speaks and QX, had than sense year's their backlog in at anticipated. that is built that up we our exuberance in is the of a to to actions more anticipation budgets There's an reflected trends continue business their brands. to as return put seeing

months. now to customers. successful in would best be our not marketing the this We exceed coming we budget At have see expanding activity pre-pandemic clients to been surprised in way showing recapture pace, levels the that is

seeing excluding industry to programs are promotional the approximately market employee product have While perspective, such contrast fourth gifting compared increase a an across a of in certain is in down accelerating competitors still as of our are in pullback culture, The stand results built struggles stronger even QX generally having these to sales, is industries the quarter, whole. segments We down than verticals, our capabilities to company by and PPE client From BAMKO's than which offset diversification XX%. believe spend continue and impact of industry more when the sales. areas. relationships XX% extraordinary to BAMKO end slowed that products that promotional the spend our reflective industry as whose the client

half is the perform continues thrill BAMKO the that be While we team genuine a has best our reductions we to industry performance. are XXXX seeing we say our anticipate first Overall, as to very our a business. It's that able level offer. be to strong to six-month we at sales, continuing our as PPE currently what encouraged results in in expect should by are non-PPE

M&A market robust. the Additionally, is

now Our opportunities our are laws that grow, in pipeline especially new a that selective horizon. on lot to being of we evaluating the meet specific tax see criteria. with continues prospects very We

each and gain made was and that knowledge acquisition. By Our is a far and leadership most Gifts our to kind successful in by We and successful acquisition integration of new from in upon By continued we market By day BAMKO's respected to from BAMKO. one. experience both right better individuals, team Gifts our Gifts build great synergies believe integrate to a benefit experienced Design bolstered management quickest was companies fit, Design is highly of with cultural offer the for and vertical, from a February date. subsequent team Design quick example deal the

turn I'll the financial and call Andy his over operational Now, to for review.

Andrew Demott

Thank extremely perform, and our afternoon, continue everyone. pleased our especially challenging to times you, good Jake I'm with in how through marketplace. teams

invest selective report acquisitions. our momentum We to the strong continue results the stakeholders. businesses for We organically and our our year competitors to growth carried are last outperform through of in market solid and from to continuing and

to exceptional cash a and have profile, three pillars healthy us capability. All balance strong at high an a perform flow We key strategically operationally. are margin and foundational generation level, enable sheet elements that

Gifts quarter, Design the we the During on acquisition. By closed

quarter. to the cost million, $X.X million In spend in the $X was CapEx addition acquisition of

EBITDA, While for XX, keeping borrowings to at net $XX.X million, increased times I'll operational ratio highlights our the debt so quarter. March review our X.X at XXXX. did stable EBITDA now

this competencies, technology which with for resulting slated investments continue in efficiencies We to gain our our in Arkansas year. see Eudora, AI Dallas center pleased our and We're are robotics progressing investments will from improving well automation and machine additional distribution CID completion learning. using later and center, distribution to

that Haiti producing completed, our we of from coming our ability our And production XX% to own service when be of third better in in Haiti's to environment. to in come expected Our near next track out the shore facility our is months, manufacturing online Haiti adding expect enhances about to product of customers. on and capabilities duty-free year, proximity our XX% factories. few about a is this

square later be by replenishment of Eudora, expanded in year. in the will XXX,XXX warehouse capabilities Arkansas our distribution also new foot completion Our the greatly

products in this our million of million period million growth. versus sales XXXX. PPE comparable quarterly million to XXXX. our legacy financial million increase or compared to XX.X% resulted highlights. PPE overall year outstanding start a to $XX.X all $XXX.X relative increase segments $XX.X growth sales with BAMKO the from $XX.X net to PPE sales accounting for to with QX net contributor up of the an Uniforms were first to sales. largest $XX.X exceeded the prior Turning products only quarter had sales related for expectations $X.X year of XXX.X% quarter was again. in the once BAMKO XX.X% the We million, increased

segment The are congestion backlog, again business Jake West mention year. this impressive sales discussed quarter-end quarter. compared to zero our As continued that Gurus and versus another last $XX.X ability Total Michael to at Uniform for million the Uniform excelled warrants as increased to XX.X% BAMKO's $XX Coast core providing ports hindered our said, high at Promotional and higher XX, XXXX. maximize was Of March growth strengthened. backlog PPE services eliminations PPE essentially accounted backlog, a results quarter-end customers the million to at on which demand has million Office existing base. Overall, double-digit team level. after beginning reported pace and customer $XX.X rebounding a intersegment replace onboarding has Product Net faster sales at new million. superior to growth our $XX.X

impacted the at first Salvador the week than XXXX to As El a a were the operations shutdown operations more in due government pandemic. onset during the reminder TOG to local of for mandate quarter,

XX.X% reported we variability first margin the The due product quarter, and the XXXX. of consolidated is to of to mix. in gross customer compared quarter For XX.X%

increased While due sales as increase significant sales segments, versus in to This XX.X% total QX XX.X% a is volume SG&A of a to expenses across year. significant increased reflected quarter. commissions accrual the SG&A saw higher of first in primarily we included improvement current of our percentage net XXXX XXX(k) reversal dollars by sales increase our note, XX.X% last matching in sales million for quarter due our a and Of for $X.X to net discretionary compensation employee due the XXXX contribution. a

at Additionally, approximately Wage due the compensation $X expenses shutdown to in TOG last QX agents the last amount year. to of million without benefit of the related to paid the beginning reductions incurred sales were of implemented year.

quarter compared the rates of on year XXXX by these compared taken Net We to for in pre-COVID quarter million last in beginning operating XXX.X% levels first quarter quarter. per year. million the operations $X diluted note, benefit million the from XX basis, pay or markedly annualized first first outstanding period were this million last increased of savings quarter diluted Income $X.XX would an XXXX. diluted first margin increased same shares to share last QX, a quarter. reduction share to shares X.X% $X.X by of $X.X for $X.XX income to the in X.X% have the last increased and have compared been million to at XX% second million $XX.X reached to the reinstated compared or per $XX.X to year. in Of Wage which first year's X.X%

for rate Our effective XX.X% compared was year XX.X% to ago. the a quarter

the sheet the the million period. company's compensation capital significant the XXXX, of a of in were current the is in and operations income XX, accrued performance of reduced at of few to customer increase end operating that first $XX.X cash highlights. with last quarter since accruals balance from $XXX.X Cash year. in XXXX the timing This for quarter primarily included Working the at $X.X received $XXX.X we XXXX flow strong and paid Now were This increase associated were to first which quarter, reported end taxes. due and from mainly due XXXX. This March of increased million for to is cash quarter. had million At an at end the payments equivalents million. incentive of

of and the primarily first investments Arkansas. still anticipate million XXXX. paid also to share for approximately million in year to We related in Capital automation with a the $XX per expect million $X.XX the of CapEx projects $X.X continued of quarterly to this were dividend quarter. be facility range expenditures the investing $XX distribution We Eudora, during our heavy our in expansion

Michael we contracts to rated through In of providing April XXXX, the fully we who majority second in of plans. settle more termination pension quarter. purchase elected the associated plans receive pension being settlements under planned pretax million currently from million, outlook. obligations were his that for by March deferred the companies insurance as defined plans of million of the will of back eligible $X.X lump-sum closing charges annuity We the to the and the our plans, them. the non-cash accumulated future now paid to one highly $X.X estimate assets acceleration and XX, accrued its payments benefit the XXXX. settled and with under quarter we of And in qualified call remaining I'll from a XXXX or expect the non-contributory terminating company loss. second during of These participants comprehensive total to which are funded the the process primarily general is obligations between related remarks which the a two represents record charge other of Lastly, the turn of $XX.X

Michael Benstock

push we so our taken steps always the as building navigate Thanks, sales, To us opportunity our market still most this are other to national cases, for unlock. management, We've talent for Despite our design, employees. come across much The is past recruit in have Andy. in as date, and teams in continues landscape, the business. level. operating ever bold challenges reps management than and as Uniform we to in before. our in history areas to plant key are to confident To positions stronger sales future BAMKO well. key and this manufacturing, take time investments the no project well several out other strongest as remain In happening recruiting distribution, top well fuel workforce out key next marketing Uniform we as positions. is to heavily making We're growth, different. expansion. IT, segment, prudent in We it's same XXX-year

we is us M&A our Our managing business. where to be without for wanted distracting pipeline

expansion distribution for potentially that our strategy and niche center call include acquiring into options that of as new that could up point long-term leaderships, pools This are might hold in At channels capacity capacity. scale agents investigating as is and us Poland and augment of Additionally, we us to beginning well open new give of continues entry geographies and service. bring to TOG, possibilities new into us distribution variety take businesses we are demand to the at center internationally. international we increase call beyond a increase our our services to as looking

long-term grow our sales point raising updating and competitive disrupt a year seeing better Previously, a for consideration to in us for We a in dynamic landscape million the of has weakened we growth. we operating environment share. are sales and never there view, market as we take rates acquisition, are goals. our time to additional acquisition in for in Gifts net The expected XXXX. in million and our our approaching organic expectations, segment Design is growth Uniform BAMKO CAGR updated sales the show projecting CAGR period, excel XXXX. us is for at net continues a XX% XXXX. current sales By a of XXXX. during to organic CAGR our what TOG's same $XXX our been yielding XX% estimates momentum XXXX Factoring see XX% and and through growth recent into guided $XXX through of outlook from trajectory our to expectations Taking From

overall sales Overall, We our a of XXXX for net XX% exceed from expect and SGC expect CAGR to expect we XX.X% to acquisitive in of XXXX million current absent margins $XXX operating in units in XXXX. excess XXXX. by any in growth business

strong to by prevail most and work always team underpinned them is call loyal we result With customers. the model the determination that, strategic integrated through our a and the for our without in challenges and Business questions. overcoming as would will entire performance is of like precipitated our its working by of outside lately diversification those hard and We're Our do. events. open we challenges, business of which your never

Operator

question-and-answer We from Barrington question from ahead. Research. will Kevin Please Instructions] go Our now the [Operator Steinke comes first being session.

Kevin Steinke

Hey. everyone. afternoon, Good

Michael Benstock

Good afternoon, Kevin.

Kevin Steinke

past were Are a maybe the some that. as although about reusable the starting what still the continued continued like that even just still bit, as sense strength off wear around to just interested pandemic be side? some they helpful. healthcare with in wanted to the healthcare there? You segment maybe seeing before, way some to some go on things you're and But strength. about institutions recede mentioned comments Are that there? talking would is You seeing the have talked Uniform I start by before you pipeline,

Michael Benstock

Sure.

is side. robust to there's laundry get channels it to now. the doctors employees lot higher the people in this a of as a pretty we business back retail is see so mean, shortage basically shortage right in of tremendous that and workers Hospitals of still on. seeing channels business. channels. and operate usual no and opportunities high procedures the I And still channel by things censuses there's very have seeing expect It's that But of the new institutional and healthcare normal. Our driven who country. They healthcare ones are delayed even from in,

SanMar But we're expect for that CID a that have spoken spoke the there. pretty press walmart.com an not defined about when past, side the We about, traction on, taking nicely. they've and there, to the we all the opportunity SanMar product designed specialty call, different online giving taking we're on some We've position and from entered channels the buy we've And you'll that which the in a the XX,XXX strong. been they starting in very to them. it in It's we've Google on WonderWink interest services in on online, companies early. -- e-channels them reported basically both channel grown gain in date to UniFirst the target.com, the out and Our very any new very a -- we channels are and go that release. INDY online you in the big internet ad you to last and see

feeling So, the side. good really healthcare we're about

bit employees. all businesses said essential anybody. normalizing their were as what is, to that why of the big imagination are a during call a as They're the we almost early other on not see that talk I the to dormant seeing to earlier, finding essential a eliminating and of pandemic, find not starting those true. right year long because finding essential a little everybody my new last to restaurants little their are own do buying motivate that's put back hire let the have these during encouraging it is And for they're bit. employees cadence haven't And the we're come And I businesses we're resurgence foodservice and to been On and stages a businesses so a other uniform. they But that to a is pandemic, leveled off we're businesses new of and really side, And now little as grocery, Hotels, them They're into all businesses to what quiet pharmacy I'll to down the customers box. to bit mentioned use seeing that's hiring struggling and crazy hard seemed be or They weren't uniform. into people during people, put we're typically normal, and interestingly, what time. on. way people starting ago. of call great the people also

the I actually as this very, -- services, quickly services, our XX% chart non-essential XX% the they of showed That businesses. as again over of businesses more a and limited essential is the think all expect back resurgence. seen we we know and did service getting very full where can non-essential about, are are XX% hire, to the hotels. schedules about last as and airports -- that starting airplanes ago, have are business a that grow We few particularly we full the calls we spoke and and Kevin, again so come So, couple weeks, are businesses, nicely getting we

we've getting December we but uniform perfect But and And we're both any that So, as the weren't -- January weeks. on any we seem February it's situation. we shortages. would I -- do well But there's be There some there are the a the of now on or than well, as over the of the feet sides much trajectory. own ground going well, in last issues about which as awful. were be been rather met having to China our But the where of we're as and trying and relationships February not in that business. we've sense. along with feel excited competitors. anticipating -- knows on our all right That's have Who we like those it's we're going better competitors. our long to issues, -- through the -- feel better that. much our able challenges We where few to of think the absolutely We to turn to anybody we're can. have them -- of possibly been because anticipate

Kevin Steinke

headwind that your have how kind a as about across … are those bit. much might of of growth I that And But to the sense logistical said rippling was what's Do you a a Great. talked Okay. economy. you've think, tempered growth? you issues to it have

Michael Benstock

to inventory We we What we But we dice it's we don't Yeah. $X perfectly. orders we shipped if I about orders would of would issues. hadn't slice approximately more, could actually if have is what done taken and that have it mean, took, have those hard on -- the shelf. million logistical had know had we

Kevin Steinke

Okay. it. Right. Got

clearing issues subside? have see think you I the those to do have beginning up fourth ways might of these challenges But quarter. that know think you still there's of off. some by to mentioned I -- line you sight that perhaps some you

Michael Benstock

thought is the when are like going It's the us. We end, pandemic to going predicting logistical challenges be end. that pandemic by to largely behind now when would

out is around this, as or season, rail early which see. my retailers and our of the of in November, we're well on Although, to inventories container that quarter, believe respect more there Christmas shape seems And that's suffering to it that by crystal internet and going a bringing who the of space -- what's around long yeah, but States. now, United ball when that's and coming fourth buying, not are issues. XXX% We're the October, stocking what to logistical be always But driving September, these in bring is in the it the to is get so better supply now. less. how to A all for impact with ships continue And right, I impact some truckers product -- know to it, demand then in what going with same coming we back up which lot U.S., other of depends don't on happen is all And lot what in that we're generally I we're if before that's as of but places going out thing forecast slowly. basing are pretty are going the happens our world right challenged how their to but than places. they

Kevin Steinke

Fair Okay. enough.

You more acquisition that some some could are smaller much perhaps of also lead mentioned significantly challenges hitting opportunities. these to really competitors and that

a normally factors? of attractive a you an that's external struggling that if would -- that candidate still kind equation? issues, just business, how with of being challenged smaller but good business you by kind pretty of there logistics kind to they're if you So, see quality is that for acquire, through knowing Or think

Michael Benstock

development that in we We that their office look can have Yeah. back the IT at America a we India do our in we side disproportionate those in our and business by that with that Central SG&A Jamaica. that on reduce help struggle logistics, overall have of sourcing,

A candidates making the already us. great table. we that solid great to money add with those can all some bring that So, to business we synergies are that's for

to PPE always case. It's not forces. yes. companies these outward this happens and the uniform of jumped that companies It on the lot in in A be So, way.

PPP loans better SBA we've them, That from interest ones, quite this. loans of SBA through And than forgivable some others, with saved them the the everything, frankly -- otherwise. SBA and And them low and money did heard. destruction, the smaller and really it helped coupled the

have ago, people we okay, us government have when We prepared in serious with And can't be dumps, going on got was to money. and run would will their to said out. months discussions the And they they're consider know were talking they they sending and business but because them we does, to now. I'm already Their keep okay. it to no, more having down PPE were them that's asking even money. some they'll the than So, people business in spoken

Kevin Steinke

about starting take clients and grew strength And it to And BAMKO, Great. like at when spend they marketing outperforming dollars looks growth should share? we noticed well. think doing is taking we but XX% I still how about just there, that -- think obviously should market talking you are back business in demand sales, think you the coming the you around really longer industry. out of if I PPE But that their the have XX% pent-up Okay. term you're year-over-year. noted terms about versus

just some about So, talk can points, please? of those you

Michael Benstock

that That's I'll the let why call. on him to in jump one. brought we Jake

Jake, ahead. So, go

Jake Himelstein

Kevin. the again Hey, to the thanks congratulations great quarter. to and talk on Nice for you

we've mean, it's expansion our sales reps. new It's of bringing It's talked all impact. are I what clients the to trying many in industry growing lot things smaller those having taking odd the employees reps. their of offer some about with to office, about. recapture It's the they share. able can't customers twenty the thousand just on bringing It's into and mom-and-pops, marketing back is the yeah, existing things landscape it's to whom you budgets offer, or to and and are competitive And a an we're market Promotional So, clients. customers talked of distributors Products of all whether sales

to lot on, get to that really we've attractive customers to as we board. shield. and customers talked had landing customers, converting lot sold new to spot salespeople, for we Promotional so, continue them find sanitizer, these before. face additional as a And business. And come brought we're well of We've only And customers opportunities customers. on continue to PPE we success were And their about Product work masks, of in to converted that Promotional a penetrate Products right, for those it with

of base. programs too. the and some leveraging what's been way, exciting we're a we've And successes a addition really future of about awards, Gifts and under base for well potential. really And about excited and client one. By corporate And to our we're our The current been us recognition incentives, success come. salesforce excited already so, source already there, client We're really to seen Design big has to extend that's

Kevin Steinke

you gaps will the through Okay. like are acquisition? you Are growth forward? mix going BAMKO, look you think still mostly at going be there? on organic to as fill maybe Great. some And in there you'd to focus do What

Jake Himelstein

opportunistic, look we're it. it. what to something line, Absolutely, opportunity goes force ability a that infrastructure warehousing. good before customers it said again, We're at business. the a might look potentially through there's line nothing problems, lot of comes scale I the attractive good force for to new comes along by Michael it. a that underlying logistics few that fundamentals, mentioned Michael If us there's them be. mean, was spot it under turn Maybe landing to right struggling to We're mold, fits the big not companies setup, an The way model. issue. fits that pandemic. we'll mold, more going at I major technology, logistics, and And before, a but for going puts culture, absolutely, profitable we're right? But the in through can accretive not one their Yeah. to them we'll that's bottom along the into of think our have struggling. we've quite Good are affected and problems, it whatever And we supply companies, if

larger really lot We have we right a those be that of spot lot landing to than setup and a are company now, attractive to we're targets.

Kevin Steinke

Okay. Great.

at that terms or change, function kind review going You on XXXX, from guess, toward as kind of of mentioned normal and we facility a step Can just what forward? see in just you you of XX%? benefit of of completed looked this a likely Eudora continue margin kind layered that year. is I that kind trajectory

Michael Benstock

year closed the the HBI some there. we the Arkansas. ultimately And get moved helps be -- sold to we to But in That's in along the the to we all steps place XX%. -- warehouse and last the office building efficient we warehouse consider that multitude us that Arkansas, Kevin, us and mind, moved last our to the part, to anticipated keep there get a distribution be challenges what that yes, would we that's to anticipated warehouse. the of number. and from with most standpoint, storage that to When

to have XXX,XXX facility, square was to longer take the our foot XXX,XXX term which is put main plan be replenishment to was warehouse, which a -- our so would warehouse receiving which warehouse, and And feet. a square

warehouse feet that even additional [ph] replenishment, square road, put there. in into may going The Arkansas I is but system, feet systems off robotic XXX,XXX we So, us is square actual I that and we addition the an footage to facility, our bringing the the which have that believe, by greater the few we for square XXX,XXX not facility, were just put now be house which technology to down to efficiency. replace the multi-shuttle ultimately bring a was in to the

level serviced it's give building. from are all business we Healthcare's out during growth all needs us that it the is next square that the of five -- Seal There these certainly economies expectation we've of of both us service Eudora, years the and foot of that our and to foot XXX,XXX anticipate to So, get scale. our will the next years, taken Arkansas, as square HBI's grow, Fashion will And what stated. five business, that from being we to we now XXX,XXX building

Kevin Steinke

Okay. Great.

Gurus Office The center for call potentially acquiring businesses. other mentioned You

time that talked might the that. you've think have about first been I

that the types of business? of So, the would are that businesses there And of terms of your same I'm smaller kind of fits available. curious just the number that cultural them fit in be the on significant et about a strategic could with cetera, with be number focus and logical agents,

Andrew Demott

of to we the fairly rich Andy. we've there Yeah. on was something consider. it's I targets think would acquire. a Kevin, And out mean, we there's in past. It landscape it touched

statements capacity the And the geographies this looking of the an really this ties employee it was last. going draw about find at be pool think to workforce individuals our started will our trying well and that expect to time a up in options. talk, as in us probably quality We it of work-from-home are fit, being able need that important beyond that tremendous And ultimately to we think means there's certain or And of we're touched end Michael in which case, hit that going it constraints of had how lot a key the for team. be at we're growing, that the a going mean, It in and when with matter of far employment do soon we're to going building rate think little And how really additional we to relatively ultimately, it consider or capacity XX% up out the always really more I that first facilities. we had forward rich mix. picking long we will to which to our is pandemic it's This expected as the it. to weren't things off. is normal right. the they're I You're a work-from-home, I was stuff. culture, those on one the constraints -- we that -- taken our it to last in to --

One quality over key of the mean, for us centers call sort that we of of the the is things quality is speaking, out other of English I when that and factors going were have. I -- left English, critical that we

Michael Benstock

been people as Gurus it's the really largely The except them, rates there frankly a they because Kevin, of here work-from-home. are wildest pandemic not been had dreams on anticipated. Office -- as far cadence. not has quarter. affecting had the that lot concerned, Yeah. they grew is last their in our quite growing imported were we hadn't But base they during a And is at have their Supposing pandemic pandemic, nicely business still -- the customer is as

through word there with them servicing. but our in sweet the within mouth received in We of has quite few Business the And -- Dominic where the word time-to-time to has us spot, media us people five lot a wonderful us. and the who that wanting been we've XX channels. for have different in white from about cadence interested recognition. awards or to a of Leide two do over three niche He still businesses. social some gotten that are lot spoken our frankly, larger, even years business very coming to a And has papers particular. of who We've of runs around. does gotten seats, last a we're

brokers, business boy, we us going capacity But that the an for of And and -- I We'll one. faster. wherever issue we some and important grown looking were enumerated dealing the doesn't lease have these that It them a buildings some thing good us points a business years said, long their in a for We're ago, to don't with I with become we for don't buildings. mostly you during let sooner. in be who've geographies, with growing the So, how for preferred at buying We is is vendor. synergistic what us looking well it's as just brokers Southern hoping Andy I just have many and a great have infrastructure do, down. pandemic going that issue anticipated. not Hemisphere, been never know and would faster the a think than use phenomenal. are. out I'm problem any capacity when this the growth But it's to salesforce that's I We're a have as relationship they have Hemisphere. means few years. instances,

Kevin Steinke

wanted do And -- other kind $XXX the you're about Great. nearly specific mentioned any color target around updated to you there build By just we're assuming I is obviously, of PPE I to sales you in there but in that for sales million Okay. know, XXXX. -- of you number lastly, or ask Have would that? of a that layering Gifts be Design, how helpful.

Andrew Demott

PPE think non-PPE for -- $XXX backlog of year a business this business said, what as whenever PPE said with think quarter, And really what we million I legacy November. the ended the as fairly in included is have we million. Kevin, in with $XX.X What the in Yeah. well in Uniform as upcoming. we I PPE I our about we've of business, consistent

within that's PPE. forecast really for contemplated what's this year So, for our

million. On the would included $XX they $XXX was of is end is XXXX million And but number -- pick expect it $XXX,XXX will for backlog the PPE. the the they I million total. expect projection some at I side to for quarter approaching -- not Uniform up, BAMKOs, only their another that for $XXX mean, in continue I

Kevin Steinke

helpful. nice all That's and the Great. results. the Okay. Thanks congratulations for on questions taking

Andrew Demott

Kevin. you, Thank

Michael Benstock

Kevin. you, Thank

Operator

concludes [Operator to back would like I session. This Michael conference our Benstock to Instructions] over remarks. question-and-answer closing for turn the any

Michael Benstock

and results now you well All us again then. we'll then in for look quarterly Thank to forward We July. and between Be our reporting second right. for quarter speak joining call.

Operator

is today’s you concluded. presentation. Thank for The now conference attending

You may now disconnect.

Superior Group of Companies (SGC) 29 Apr 212021 Q1 Earnings call transcript